Technology Outlook in CPG Domain - During COVID-19 | Smart Manufacturing | HCL Blogs

Technology Outlook in CPG Domain during COVID-19

Technology Outlook in CPG Domain during COVID-19
July 08, 2020

Corona virus or COVID-19 is going to be one of the deadliest disasters in the 21st century which has affected the health of millions of people, way of work and life and brought global economic calamity. This pandemic has impacted the economy which can be seen across various sectors, especially in Consumer Goods Industry which is largely dependent on consumers. In the present crisis scenario, as consumers are bound to stay indoors and practice safe social distancing, we are seeing a dramatic change in their buying behavior like where they shop from, how much they shop, and the way they shop etc. The first and the foremost priority for them is to ensure their health safety and have enough supplies as per their needs.

This trend is similar in all the countries across the globe where the consumer is relying more on online shopping portals/channels to stock up on the essential commodities. In a survey done by various research organizations on consumer buying behavior in current COVID-19 pandemic situation, there was steep rise in online shopping in the last one quarter and this would be the new norm post COVID-19.  

To address this ‘new norm’, consumer packaged goods (CPG) companies will need to focus on various business strategies that would help meet the consumer expectations and satisfaction while at the same time taking control of their demand and supply chain management. CPG would have to look at a holistic approach to commerce where technology is going to play a pivotal role.

Enabled by technology, consumer packaged goods companies are communicating and engaging with their customers in more innovative ways by leveraging the spread and convenience of digital touch points such as Integrates and aligns digital channels  , partner e-commerce and cloud retails to enhance connected experiences across various stages of the consumer journey.

The above-mentioned technology needs are going to be enabled by the adoption and consumption of various technologies such as:

Cloud Adoptions:

Amidst this crisis, organizations are surely not going to choose any new supply chain management platform where they would need to invest heavily on time and money. Enterprises may go for the options which are convenient to adopt, will provide Mobility, instant scalability and subscription-based payment models. As users are practicing social distancing, enterprises are exploring the feasibility for end users to operate from anywhere and anytime, creating greater urgency to adopt all forms of clouds. Cloud computing has the potential to increase agility related to new market dynamic, improve supply chain management with less upfront investment in IT. -

We have seen that CG&S companies are largely adopting low-risk, as-service model in the form of cloud computing services. There the cloud adoption trajectory  depends on how cloud can generate value other than merely driving cost reduction.

Ways in which cloud adoption can transform the economies of CPG companies are:

Maintain Customer Relationships at lower cost:

For CPG industry, consumer is paramount, so customer relationship economics becomes the starting point for CPG companies to adopt cloud. Cloud computing can help in deepening customer relationships at a lower cost by improving the fundamental economics of selling directly to consumers. Cloud Computing also provides the opportunity to dramatically improve marketing ROI by narrowing target consumers on the basis of predictive analytics of contextual information like demographics, attitude and behavior.

Increase in ROI with less upfront investment in IT

Cloud computing has the potential to increase business agility by providing an opportunity to build out cloud-based infrastructure to rapidly serve new markets/geographies.

Cloud computing has the potential to increase business agility 

Faster & Shorter Innovation Cycle

Cloud computing can help in scrutinizing R&D processes during product design, formulation and testing thereby accelerating time to market for new products. It can also help in reducing the time taken for IT application development by avoiding inhouse infrastructure setup times.

Era of Smart Manufacturing

Industrial IoT

During this crisis, where the customer’s buying behavior is  radically changing, there is a direct impact on the commerce of Consumer Goods, the CPG industry is looking for the tools which enable them to conduct better analysis so that they can effectively and efficiently manage their production as per the market demands. To leverage the full advantage of the enormous opportunities, CPG verticals are using IoT which is one of the most disruptive technologies of the decade.

IOT can transform the way the CPG industry targets and engages with customers during daily operations. With the ingress of connected devices, IOT can help CPG companies to integrate an ever-increasing quantum of data that can be used to improve products and services, supply chain management and can ultimately drive customer satisfaction across various touch points.

IOT based technologies are providing unit level visibility on the shop room floor as compared to traditional batch level visibility and this arising Era of Smart Manufacturing enables real-time, autonomic interactions among machines and systems.

This is facilitating companies to develop more innovative products, improve operations, perform predictive maintenance and to become more agile and competitive. Large amount of raw data can be processed with the harness of IOT enabled solutions which can virtually track capital assets, resources, products and provide intellectual business outcomes to manufacturer operations which resultin streamlined business processes and optimized future supply.


COVID 19 has uprooted normalcy. With changed circumstances, there is a variation in demand-supply, consumer preferences, and the rate at which consumer packaged goods (CPG) are being consumed. This has forced CPG companies to reconsider strategies and capabilities related to manufacturing, logistics, pricing, customer engagement or commerce.

Below are some of the ways in which AI can help CPG to respond adequately to COVID-19

Demand & Supply Chain Management

AI can help manufacturers to foresee product demand & quantities which can thereby help them to produce certain commodity in that quantity by taking into account panic buying and stock piling amid COVID-19 or stop the production of a certain product temporarily. This will help manufacturers to meet the increasing demand for essential products like – sanitizers and masks and also reduce the stress on available resources by temporarily stopping the production of non-essential items.

Customer Engagements

Personalization plays a vital role in retaining customers. With most customers at home & exposed to various digital channels, AI driven insights can help CPG’s to generate product recommendations and content to retain buyers and deliver the right product at right time, at the right place and the right price to lure customers.

Dynamic Pricing

Dynamic Pricing which is also referred as real time pricing allows companies to adjust price of goods or services, on the fly in response to market demands. Economic uncertainty amidst COVID-19 has stressed individual markets and has affected the purchasing powers of families in obtaining goods that are essential to keep themselves safe during this time.AI driven insights can help CPG brands to predict future demands and consumption patterns so as to initiate dynamic pricing when the demand of a product exceptionally exceeds its supply. Also, AI can ensure that the economically weaker sections are not deprived in their ability to restrain the spread of COVID-19 and stay healthy.


AI can help to identify obstacles in the supply chain that are resulted due to the restricted movement of people and goods along with the quarantined units and farms. By identifying the potential disruptions in the supply chain CPG’s can look for alternative supply chain to ensure continuous delivery of goods. Also, AI can help in accelerating ecommerce and D2C sales by prompting CPG’s to initiate ecommerce during the shortage of supply. This will significantly help to reduce the stress on logistics.

Digitization of Factories

As this pandemic situation of COVID-19 resolves, many CPG companies might expect sudden sweep in the demand. Therefore, digitization of manufacturing systems and automation at the production level will become necessary to meet this increasing demand. With the help of AI manual process can be automated and data from sensors can be used to improve insights into inventory and machine monitoring can be used to better understand the health of machines and ensure preventive maintenance.

Strengthening cyber security requirements during current Pandemic to ensure future Business resilience

Cyber Resiliency

As we have seen the current Crisis has caused major disruptions to global Industries, the Industry shutdowns led by social distancing, uncertainty around consumer demands in many areas have left  manufacturers with no other option but to opt for multiple channels for consumer engagement which is the utmost priority.

The exceptional efforts by many organizations to secure workers and help customers during this crisis have also increased the exposure to cyber threats. Most of the organizations are supporting Work-From-Home technologies, leveraging Public Internet mediums to communicate, extensive use of online services and various smart manufacturing digital tools to do business to make them prone to be exploited by the cybercriminals.

To deal with the impact of COVID-19 on cpg, CPG companies may need to roll out technology initiatives on tight timelines and budget- which can add to the challenge of mitigating cyber risk. Underinvestment in cybersecurity can impact long term growth of CPG companies. Consumers today consider data protection very important and strategic investments in security can help CPG companies create competitive advantage in today’s era of growing cyberattacks.

As more and more CPG companies are adopting new technologies like Artificial intelligence, Internet of Things products, Machine learning, it becomes very important for CPG manufacturers to invoke customer trust. This could be a golden opportunity for businesses to embrace cybersecurity so as to build brand differentiation in the marketplace which will thereby help in invoking the customer trust.

Ways by which CPG companies can ensure cybersecurity are:

  • Embed security upfront in your products and services to invoke customer trust.
  • Maintain Transparency with your customers as to how their information will be used or shared.
  • Mandate that your organization follows cybersecurity standards.
  • Embed cyber risk as a job responsibility for C level executives who are responsible for brand management and customer engagement


The changing dynamics make it imperative for CPG firms to transform their business journey by leveraging robust and Industry knows IT services and solutions. Enabling technologies like smart devices, data analytics, cloud computing and mobility enhances the capability to control this sea of information, both practically and cost effectively. Enterprises can opt for innovative digital, Industrial IOT, Cloud, Big Data, Analytics solutions to bring the intelligence in CPG domain which harvest the overall manufacturing supply cycle as well as potential revenue opportunities. In this way they can contribute to the society by enhancing consumer satisfaction with a greater assurance for the Pre and Post COVID-19 Era.